Financial Literacy Month Term of the Day FIDUCIARY A person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust. Working with a fiduciary is ideal, as...
Financial Literacy Month Term of the Day ASSET CLASS A category of investments that are grouped by common attributes, such as income characteristics, tax status, relative liquidity, growth potential traits, and more. Major asset classes include equities (stocks),...
Financial Literacy Month Term of the Day MODIFIED ENDOWMENT CONTRACT (MEC) According to federal tax law limits, MEC is the term given to a life insurance policy that’s exceeded its funding. In other words, the IRS doesn’t consider a MEC to be a life...
Financial Literacy Month Term of the Day REQUIRED MINIMUM DISTRIBUTION (RMD) The amount of money required by the IRS to be withdrawn each year from traditional IRAs and employer-sponsored retirement plans. Thanks to the recent SECURE Act passing, RMDs now generally...
Financial Literacy Month Term of the Day 1035 EXCHANGE Used in life insurance, the IRS allows a 1035 exchange to be executed to replace one life insurance policy with another. Any life insurance type can go through a 1035 exchange except for a term policy, and...
Financial Literacy Month Term of the Day INDEXED UNIVERSAL LIFE INSURANCE (IUL) A type of cash value life insurance where the cash value is credited interest based on outside economic indicators, such as caps, floors, and the insurance company’s participation...
